Startup accelerators, also known as seed accelerators are business programs that support early-stage, growth-driven companies through education, mentorship and financing. For startups, the range of funding options is overwhelming. Some funding options are often government-funded, generally take no equity, and rarely provide funding, but an accelerator can be either privately or publicly funded, and cover a wide range of industries. Consequently, they are open to anyone but highly competitive and its resources and mentorship help startups to promote what might otherwise be several slow years of growth, into a few short months.
The first independent startup accelerator was Y Combinator. Once this business model succeeded, seed accelerator programs began growing rapidly across the United States and Europe. By 2015, around one-third of startups that achieved funding, went through an accelerator. Nevertheless, large corporations have begun to create their own accelerator programs, with the same principles, but specific categories.
Accelerators are for startups that already have a valid MVP . In other words, a product with a few paying customers, a group of free users, or early signs of strong product-market fit. They often take a cut of equity in exchange for program placement. In addition, accelerators are intense and fast-paced, and can take up to 3-6 months to get an early-stage startup ready for market.
The application process is done in stages:
- Application: Covers startup’s idea, market, traction, team, and other aspects vital to success.
- Assessment: where they analyze instability, revenue potential, and overall strength of the product/service offering.
- Interview. 20-30 minutes of qualitative research.
- Evaluation. Interviewees provide documents to prove their statements about revenue, legal standing, or any claims made about the company.
- Acceptance. The teams that made it to the Assessment phase will receive funding.
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